Malaysia may increase rubber output

Rubber production in Malaysia, the world’s third-largest grower and exporter, may expand 6.5 per cent as higher prices encourage farmers to boost tapping, according to the Malaysian Rubber Board.
Output may increase to 1 million metric tons this year, from 939,000 million in 2010, Salmiah Ahmad, director general of the board, said in an interview.
“If the price continues to remain this strong, then smallholders will continue tapping,” said Salmiah, who joined the board last year after working in the palm oil industry for almost three decades. “Smallholders in Malaysia treat the trees like automatic teller machines. They will tap when they need the money or when it is very lucrative for them to tap,” she said.
Higher output from Malaysia may ease concerns that global supplies will tighten after floods hit key plantation areas in Thailand, the largest producer and exporter. Thai production may decline for the first time in four years if rain persists across the country’s main southern growing region, according to the Thai Rubber Association.

Futures traded on the Tokyo Commodity Exchange have jumped 24 per cent in the past year, surging to a record 535.7 yen a kilo (US$6,572 a metric ton) in February. The October-delivery contract traded at 395.2 yen at 10:12 a.m. local time.
“We anticipate the price will remain stable and strong because of high demand,” Salmiah said, declining to give a forecast.
Thai Output
Rains may have cut Thai rubber output by 30,000 tons in the second quarter, Rubber Association President Luckchai Kittipol said on April 21. Reduced production from Thailand, which accounts for 30 per cent of global supply, would potentially increase costs for tire makers like Bridgestone Corp, Michelin & Cie and Goodyear Tire & Rubber Co. Bridgestone said in March it plans to raise tire prices in Europe by an average of 7 per cent in the second quarter.
Output from Malaysia, which represents about 10 per cent of global supply, may double to 2 million tons by 2020, Salmiah said. Old trees will be replaced with higher-yielding clones and better technology will be used to increase output under a government development plan, she said.
Malaysia plans to increase plantation areas by 30,000 hectares (74,132 acres) a year over the next five years, Salmiah said. The Southeast Asian nation currently has about 1 million hectares of rubber, of which 650,000 hectares are being tapped, she said. The rest are unattended or too old, she said.
The country’s exports are forecast to rise to 930,000 tons this year, the highest since 2007, according to the board. The country shipped 901,000 tons last year, with almost 40 per cent going to China. – Bloomberg
(Source: http://www.btimes.com.my/Current_News/BTIMES/articles/20110427101452/Article/index_html)